According to Friday’s New York Times, western companies now consider Libya open for business. That seems to be as propitious a time as any to add up the costs of the Libyan Revolution. I’m sure someone has done a more complete and detailed workup, but I haven’t seen it yet. So here’s a back-of-the-envelope, first-draft tally of costs.
Lives lost: The NTC claimed 30,000 dead as of September. Cooler heads suggest something like 12,000 fighters dead and maybe half that number of civilians. (This is assuming that most of the people currently listed as “missing” won’t be showing up, which strikes me as reasonable.) Either way, for a country with just under 7 million people, that’s a lot. It’s proportionately like the U.S. losing nearly a million people in six months, although there is a caveat to that comparison which I will mention below. Injured, harder to say, but probably comparable to the number of dead.
Refugees, let’s see. You have the people displaced because their homes have been destroyed, or because fighting raged through their town. The best current estimate seems to be from the IDMC, which puts the number around 240,000. That is not a small number.
Then you have the people forced out at gunpoint. There have been sporadic reports of clan-based ethnic cleansing, especially down in Berber country, where Qaddafi liked taking Berber lands away and giving them to pro-government Arab clans. The town of Tawergha seems to have been cleansed of at least 10,000 inhabitants. That one is getting lots of press because it’s right next to Misrata, where heavy fighting went on for months. But it’s a safe bet that more of this sort of thing has been happening further away from the cameras. At a rough guess, somewhere between 3 and 5 percent of the country’s population is currently homeless. Some of those will be coming home over the next few months, but there’s a large number who may never be able to go back.
Those are the internal refugees. (Internal displaced persons, or IDPs, in the lingo.) There are also at least a couple of thousand Libyans currently refugees in neighboring countries, mostly real or suspected Qaddafi loyalists who have fled to Algeria, Chad, and Niger.
Then there’s a much larger number of Africans who were guest-workers in Libya but who have fled now. That latter figure is really blurry, but it’s certainly tens of thousands. These guys were a significant source of hard currency for their home countries; that’s cut off now, as they probably won’t be welcome in the new Libya for some time to come. The collateral damage to the economies of Chad and Niger will be small but noticeable.
Infrastructure: the oil infrastructure took some damage but nothing lasting — repairs are already underway, and should be mostly complete within a year or so. And the fighting in Tripoli ended fast enough that damage was minimal. But several good-sized towns and two city have been heavily damaged. Misrata, home to over 300,000 people, was the scene of intense fighting for four months, and was hit with thousands of shells and hundreds of rocket attacks; Sirte, a smaller town of about 75,000, just finished several weeks of siege. The reconstruction bill will certainly be in the billions. (Our original estimate was higher, but my co-blogger and I went back and forth on this by e-mail, and we concluded that it will be less than $5 billion — probably in the range of a couple of billion, give or take.) Here is some satellite imagery of Misrata that gives a sense of the damage. The U.N. after-action report can be found here.
The above, of course, is why the comparison of a million American deaths doesn’t quite work: casualties and physical damage don’t scale linearly. A six-month conflict that killed a million Americans would almost certainly entail proportionately far more physical damage than the Libyan Revolution.
Exports: pretty much all Libya exports is oil. And plenty of it — around $40 billion a year in export earnings. They’ve just lost more than half a year of production, and will see reduced production for another year or so until all the damage is fixed. So we’re looking at maybe $30 billion in lost earnings. In the short to medium term it’s a hell of a hit — Libya’s GDP in 2010 was just $96 billion.
This is mildly worrisome for two reasons. One, Libya’s oil revenues have disappeared at exactly the time when the country needs a hit of hard currency — for reconstruction, for displaced persons, for medical treatments, for all the costs of war. And two, Libya is about to start its postwar transition to... something. Historically, revolutions tend to be followed by a period of disillusionment and disappointment.
Libya, however, is fortunate in two ways. First, the oil is still there, and will eventually be pumped, so we’re really talking about a present value issue — getting a dollar of oil X years from now instead of today. That may sound obvious, but it isn’t: Venezuelan heavy oil production took a permanent hit when production shut down for the 2002 strike. A similar thing would happen to Albertan in situ heavy oil production were it suddenly shut down (for the same reasons as in Venezuela) as it would in the tight oil formations of North Dakota and Texas (for quite different reasons). In that sense, then, Libya is lucky that its oil can effectively be “banked” by leaving it in the ground.
Second, the Transitional National Council now has access to Libya’s official foreign reserves. The Obama administration identified at least $37 billion in Libya government assets held with in the United States, and European officials found another $30 billion. We know the most about the Libyan Investment Authority (LIA), which holds about $65 billion in assets. Its new head, Rafik Nayed, is facing a hell of a job in tracking them all down. About $5.3 billion appears to be invested in Africa, and according to Mr. Nayed, “We still don’t know where much of this money has gone.” Fortunately, another $19.2 billion appears to have been invested in cash, and at least $4.0 billion in blue-chip European stocks, such UniCredit (inasmuch as any European bank can be called “blue-chip” these days), Eni, and Siemens. Liquidating or borrowing against the LIA’s assets is not as easy as it sounds — Mr. Layed “won’t make any investment moves until a new board is in place” — but neither is marketing oil revenues. (Two months ago, EconoMonitor published a brief speculation about the future of the LIA: one of their worries was that it might be looted by different factions inside Libya. That is certainly a real fear, but it would also apply to oil revenues — or, for that matter, a continuation of the Colonel’s regime.)
But anyway: something over 15,000 dead, roughly the same number injured, a couple of hundred thousand people displaced for at least 90 days, a smaller but still large number displaced permanently, a couple of billion in property damage, and over half a year of oil exports.
Comments and corrections welcome.